New and Deeper World Recession Looms

A United Nations report warns
that the cooling global economy risks pushing the world into a double-dip jobs
recession and triggering an outbreak of social strife unless governments take
urgent action to stimulate employment growth.

In what it calls a “grim analysis” of the future of global employment, the
International Labour Organization (ILO) also notes that while private
enterprises are in an even weaker position to retain employees since the start
of the financial crisis, austerity measures implemented by governments have
contributed to the growing numbers of unemployed.

“We have reached the moment of truth,” said Raymond Torres, Director of the
ILO’s International Institute for Labour Studies, which issued the report. “We
have a brief window of opportunity to avoid a major double-dip in employment.”

According to World
of Work Report 2011: Making markets work for jobs, 80 million jobs need to
be created over the next two years for global employment to return to pre-crisis
levels.

Yet the report points out that at the current rate, it would take at least five
years for employment in developed countries to return to pre-crisis levels – one
year longer than projected in last year’s report.

In a new addition, the annual study features a ‘social unrest’ index
highlighting global levels of discontent related to perceived economic
inequality. Marking an uptick in popular anger in advanced economies such as
those of the European Union, the report warns of a “significant aggravation of
social unrest” in over 45 of the 118 countries surveyed.

“As the recovery derails, social discontent is now becoming more widespread,”
the report’s authors warn, noting public dissatisfaction is also simmering in
the Middle East and North Africa and, albeit to a much lesser extent, Asia.

The report’s authors, however, offer a glimmer of hope. Calling on governments
to resist cuts in social programmes, they note that an increase in active labour
market spending by half a per cent of gross domestic product (GDP) would
increase employment by between 0.4 per cent and 0.8 per cent, depending on the
country.

The study’s release comes on the eve of the summit later this week of the
leaders of the G-20, the world’s largest economies, where participants – who
will include Secretary-General Ban Ki-moon – are set to address social and
economic issues related to the worsening global downturn.